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Bangkok Property – Land Prices Expected to Hold Up

Land prices in Bangkok and its suburbs are at worst expected to be maintained, and at best to rise by between 3 and 5 per cent this year, even though the property market is showing signs of falling amid prevailing uncertainties.  “The price of land has never dropped since the economic crisis in 1997, although the country’s economy and property market slumped that year,” said Pruksa Real Estate president and CEO Thongma Vijitpongpun.

With most landowners not needing to sell if they cannot get the best price, the cost of land is showing no sign of falling despite the property market being negatively impacted by the political turmoil, he said.  Greater Bangkok land prices have increased by a yearly average of 5 per cent, and by more than 10 per cent in some locations, since the revised appraised values announced by the Treasury Department in 2012.  The agency’s appraised values – running from the middle of that year through 2015 – represent an average rise of 21.34 per cent nationwide from the appraised value covering the 2008-2011 period.

In Bangkok, Silom Road saw the biggest jump in appraised value, with land priced at Bt850,000 per square wah (Bt212,500 per square metre) – well above the appraised value of Bt650,000 per square wah in 2011.  Then come Rajdamri Road and Rama I, both with an increase from Bt350,000 to Bt800,000 per square wah, while Phloenchit rose from Bt430,000 to Bt800,000 per square wah.  The new appraised values for Bangkok and its suburbs were drawn up after the severe flooding hit the city and surrounding areas late in 2011.

“Demand to buy land for residential development is strong every year, with leading property firms expanding their business and facing high competition to purchase land in the best locations in the central business district of Bangkok. As a result, land prices in Bangkok and its suburbs show no signs of dropping, even though the overall property market is falling,” said Issara Boonyoung, adviser to the Business Housing Association and also the owner of property firm Kanda Group.  Meanwhile, land prices at Siam Square and Rama I Road are the highest in Bangkok, at Bt1.65 million per square wah, the survey found.

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